No global currency war yet: Indian finance minister

Wednesday, January 30, 2013 - 05:22

Jan. 30 - Indian Finance Minister Palaniappan Chidambaram says it’s too early to talk of an FX war, but if any countries follow Japan and depreciate their currencies, India’s exports will be badly hurt.

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There's been a lot of talk about global currency wars if we can install with. The Bank of Japan won't won't -- reactions to that aggressive wanted to shake. And fiscal easing. And it's impact on the -- was what he'll take on knobs. But I think it's too early to call you. This is a currency war. Only Japan. Seems to have. Consciously depreciate its covenants. The more choice of Japan have. Ten years of stagnation. They have to get groups going. The kind of -- you growth follow any longer. I think bush to the wall. The Japanese government has. We react to them the only being that appears open to it. If as a result the yen has depreciated have been that's. Inevitable consequence but I think it's premature to call it a currency war. But I sincerely hope that. Other countries do not get into competitive devaluation of their currency. I mean as -- say that. Temperature and AM currency war that I mean is it something that you law. Attention be consigned abouts in times how it could impact India on the global stage if it estimates. It's true if if countries in the neighborhood. Trading partners Japan is a major trading partner China has a very major trading partner. And Osce done as a major trading partner of all get into these competitive currency devaluations central but does very badly. Our exports don't this year compared to last year because of the global recession. And if a currency war means that. Currencies of -- the country's depreciate our exports from suffer even more -- imports will become costlier. I sincerely hope that countries do not fallen into this trap of a currency war. He is mentioned in the halls that slurring grandkids who primary concern and I think. We have from the prime minister recently made that the government has struggled to rein in inflation at the pops cup a year as. The Central Bank in its macroeconomic reports. Said that the challenges to break when non monitoring in a chat is an assessment that you would agree with what's what's your take on. We have to. Contain the fiscal deficit. We have to. -- have a credible -- of fiscal consolidation. And we must. Ensure that. Public borrowing does not -- go to private borrowing. We are doing what you can and even do more as we go forward. And once I think -- survives. Say in the next fiscal year. And I think that has -- whom fumbles. Fiscal policy and monetary policy. Would go -- must survive. And to revive Google's. I think the most in the government's quote. And neither -- comics -- expectation of fifty basis points made. The Central Bank isn't the case that given the high current account deficit and sticky inflation. Then may not be enough elbow room say to speak for salt cots. Do you think these comes on the somewhat exaggerate that's. When inflation is indeed sticky -- a quarter inflation. May have come down to where she'd been -- -- 5%. WPI inflation instant in the region of about seven point 5%. And therefore. If he is described inflation is sticky. I think he's right. So I think we should allow him to take the call you steak and Cong. I rarely come to the decision. And let's see what he does. The next time around. What kind of budgets can we expect now we understand the government is under pressure from the posh teach you armed battle. Populist schemes ahead of the -- actions and course. But the ratings agencies and investors want more strict adherence to have committed fiscal consolidation -- How do you how do you walk back tight race. This year we would remain below five point 3%. And next yeah we reviewed -- four point 8%. Those animated lions. And I'm not going to cost -- strange lands. Within those red lines. If I can augment its revenues by -- administration. But it's possible to. Fund all the benefit programs of the government. So I don't think there's great contradiction between walked. As you said the rating agencies said. And what's people expect. Let me say one will it. The budget wouldn't be responsible budget.